China Works to Alleviate Global Worries About Rare Earth Export Limits
Chinese officials sought to alleviate worries regarding their sudden increase in rare earth restrictions during their visit to Washington, aiming to mitigate an international backlash as trade discussions with the US continue. Chinese delegates informed their global counterparts that the newly implemented export controls will not disrupt normal trade flows, during discussions on the sidelines of the International Monetary Fund’s annual meetings this week, as reported by sources. The officials indicated that China aimed to establish a long-term mechanism with this measure, which was introduced in response to US provocations, including the expansion of sanctions targeting subsidiaries of blacklisted companies.
China’s unprecedented move on rare earths has ignited a global pushback over the past week, with officials from Europe and Japan expressing concerns regarding supply chain stability. The heightened tensions provided the US with a chance to unite its allies, representing a setback for China’s ambitions to cultivate global relationships. The message conveyed by Chinese officials during the meetings in Washington resonated with recent public declarations from the Ministry of Commerce, which asserted that the controls do not constitute a ban on exports and that qualified applications for civil use may receive approval. Commerce Minister Wang Wentao attributed the recent escalation in trade tensions with the US to actions taken by America.
In Washington, Vice Finance Minister Liao Min engaged in bilateral meetings with at least seven countries, including the US, the UK, and Germany, this week, alongside discussions with various organizations. Meanwhile, People’s Bank of China Governor Pan Gongsheng convened with officials from at least nine nations. Official statements regarding their meetings did not provide further details on the discussions, merely indicating an exchange of opinions concerning the economic and financial environment. In light of significant dissent, certain nations seem to be adopting a cautious stance regarding the rare earth matter, choosing to observe the forthcoming meeting between US President Donald Trump and Chinese President Xi Jinping before making any decisions. The Group of Seven nations, comprising advanced industrialized democracies, did not manage to issue a joint statement or coordinated actions regarding China after their meeting in Washington this week.
Japanese Finance Minister Katsunobu Kato expressed a cautious stance while criticizing China’s recent actions and urged G-7 nations to come together and respond accordingly. “If our actions were to trigger a cycle of retaliation, that could have adverse effects on the global economy and markets,” he stated earlier this week. This week, the US undertook measures to reduce tensions following Trump’s threat to impose 100 percent tariffs and cancel a meeting with Xi. Treasury Secretary Scott Bessent engaged in a conversation with Vice Premier He Lifeng on Friday evening, and they are scheduled to convene in Malaysia next week to lay the groundwork for the leaders’ meeting. “I think things have de-escalated,” Bessent remarked Friday during a White House event. “I am confident that President Trump, because of his relationship with President Xi, will be able to get things back on a good course.” Meanwhile, China has defended its recent restrictions as a reaction to the increasing US controls; however, these measures require foreign exporters to obtain permits to ship products globally that contain traces of specific Chinese minerals. “China is trying to define this action as defensive in nature, but in reality, it’s creating additional supply chain vulnerabilities for virtually any country with manufacturing dependence upon rare earths,” said Logan Wright.
